TUCSON ELECTRIC POWER COMPANY. Transmission Reliability Margin Implementation Document (TRMID)

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Felix Haynes
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1 A UniSource Energy Company TUCSON ELECTRIC POWER COMPANY Transmission Reliability Margin Implementation Document (TRMID) Approved by: Effective Date: /c Version 1

2 Based on North American Electric Reliability Corporation (NERC) MOD Standard MOD Transmission Reliability Margin NERC Adopted November 13, 2008; FERC Approved per Order 729 on November 24, This TRMID contains Tucson Electric Power Company's (TEP) Transmission Reliability Margin (TRM) calculation methodology. The TRMID is reviewed at least annually or as needed to keep the TRMID current. The TRM definition from TEP's Open Access Transmission Tariff, Attachment C, is as follows: TRM is the amount of transmission transfer capability necessary to provide a reasonable level of assurance that the interconnected transmission network will be secure under a broad range of uncertainties in system conditions. TRM accounts for the inherent uncertainty in system conditions and system modeling, and the need for operating flexibility to ensure reliable system operation as system conditions change. 2. Conditions under which TEP uses TRM Only the following components of uncertainty may be included in the TRM value determination. Uncertainty Component Aggregate Load forecast. Load distribution uncertainty. Forecast uncertainty in Transmission system topology (including, but not limited to, forced or unplanned outages and maintenance outages). Allowances for parallel path (loop flow) impacts. Allowances for simultaneous path interactions. Variations in generation dispatch (including, but not limited to, forced or unplanned outages, maintenance outages and location of future TEP Treatment Included.

3 Uncertainty Component TEP Treatment generation). Short-term System Operator response (Operating Reserve actions ). Reserve sharing requirements. Inertial response and frequency bias Included, based upon Southwest Reserve Sharing Group (SRSG) requirements which change from time to time for activation of operating reserves. 3. TRM Calculation Methodology TEP is a member of the SRSG. The SRSG exists to allow member Balancing Authorities to reduce the contingency reserves they may carry and to allow access to other reserves to meet the requirements of the NERC Disturbance Control Standard detailed in BAL The paths and amounts of transmission required for the delivery of reserves from SRSG is based on the combination of possible TEP generator contingencies and the amount and location of the reserves that SRSG members can deliver to TEP following such contingencies. Such paths and amounts of transmission are determined based on an analysis of the following factors: SRSG member commitments affecting delivery of reserves at designated EHV buses; Location of potential TEP generator trips that qualify for SRSG assistance; The amount of transmission that will become available to deliver the reserves due to the TEP contingency; and An analysis to determine the likely distribution of reserves to be delivered by each of the member Balancing Authorities capable of delivering reserves to TEP's designated delivery points. For example, although one Balancing Authority may be able to deliver sufficient reserves to cover the loss of a particular TEP generator, SRSG may split the reserve obligations among many Balancing Authorities to minimize the total impact to any single member Balancing Authority. 2

4 TEP does not use any databases in its TRM assessments, nor does TEP rely on load flow analysis in its TRM assessments. Rather, TEP's TRM assessments are based on contractual obligations to the SRSG. The SRSG Administrator annually develops a matrix to outline such obligations and responsibilities. TEP uses the same calculation methodology for TRM values for all three time periods: 1) Same day and real-time; 2) Day-ahead and pre-schedule; and 3) Beyond day-ahead and pre-schedule, up to thirteen months ahead. TEP does not currently maintain Capacity Benefit Margin (CBM); as a result, there is no CBM set aside on any posted path for any ATC calculation horizons. The Transmission Provider will annually reevaluate its own need to maintain CBM. However, TEP has transmission capacity (i.e., TRM set aside for reserve sharing agreements). TEP will make available its TRMID on TEP's OASIS web site, and if requested, underlying documentation (if any) used to determine TRM, in the format used by the Transmission Operator, to any of the following who make a written request no more than 30 calendar days after receiving the request. Transmission Service Providers Reliability Coordinators Planning Coordinators Transmission Planner Transmission Operators An request for the TRM underlying documentation can be made to the OATT Services & OASIS Administrator at transcoord@tep.com. Per TEP's TRM calculation methodology, TRM assessments are based on contractual obligations to the SRSG and the SRSG Administrator annually develops a matrix to outline such obligations and responsibilities. After the annual TRM assessments are performed, TEP, as Transmission Operator and Transmission Service Provider, will provide the TRM values to its Transmission Planners no more than seven calendar days after a TRM value is initially established or subsequently changed. 3

5 4. Version History Version Date Action Change Tracking 0 03/31/11 Initial issue due to NERC Reliability Standard Implementation MOD New 1 03/30/12 Page 1, Section 2 TEP Treatment for forecast uncertainty in Transmission system topology changed from "Inlcuded" to "Not used" and variations in generation dispatch changed from "Not used" to "Included"

Operations Manager Responsible for the TRMID for the WAPA-RMR Transmission Operator (TOP) function.

Operations Manager Responsible for the TRMID for the WAPA-RMR Transmission Operator (TOP) function. 1.0 PURPOSE This document serves to promote the consistent and reliable calculation, verification, preservation, and use of Transmission Reliability Margin (TRM) to support analysis and system operations.